Sustaining innovations are those that are aligned with an organisation’s value network; e.g. the demands of customers. Disruptive innovations are those that have benefits outside of the value network; e.g. for which no demand or market can be easily located. Disruptive innovations are a step downward in terms of profit margins and valued properties. However, over time disruptive innovations can rapidly move upwards and supplant existing technologies. This can catch-out organisations that are otherwise profitable and well-managed. In fact, Clayton argues that it is good management itself that causes companies to ignore disruptive innovations; disruptive innovations are not pursued inside organisations as they do not sustain traditional growth.

Disruptive Innovation (thanks to Dion Hinchcliffe)

Reading this I wondered how the theoretical framework fitted with patent law. In particular, I saw an overlap with concepts of inventive step:

In patent law, patents are said to belong to a technical field. The size of the field is dependent on the scope of the claims. A narrow field could be seen to be a value network, whereas a broad field could be seen to span several value networks. Using the examples in the book, 3.5″ disk drives could be a narrow field and disk drives per se a broad field.

A “surprising or unexpected effect” is fast becoming a prerequisite to demonstrate inventive step (even though under European patent law it has traditionally been a secondary indicator). Sustaining innovations are aligned with well-defined demands in a value network. It would be more difficult to prove the “surprising or unexpected effect” of a sustaining innovation in a narrow field because there would be motivation for a skilled person to look for innovations that satisfied known demands. On the other hand, it would be easier to show such an effect for disruptive innovations, in that these often go against known demands.

Under European practice, to demonstrate an inventive step you typically need to show that a technical problem is being solved. With a disruptive innovation, uses and markets are not defined at the point of innovation. A period of trial and error is required. Hence, there may not be a well-defined problem at the point of innovation and it may be more difficult to demonstrate the inventive step of a disruptive innovation to a European Examiner.

The British courts are often hesitant to use a problem-solution approach for inventive step. It thus may easier be patent disruptive innovations in the UK.

If organisations are able to predict the uses and advantages of disruptive innovations, patenting those innovations may provide a level of insurance against upwardly mobile competitors. Many disruptive innovations are developed in-house but not developed. If they are also patented in-house, then such patents may be used as commercial leverage to slow the assent of a start-up that develops the innovative technology. I expect such an approach would be unpalatable to those who dislike the patent system.

On the other hand, many start-ups who pursue disruptive innovations consist of ex-in-house engineers. If these entrepeneurial engineers can successfully obtain the rights to their innovations, they may be able to obtain the required levels of funding to allow a market to be found. Without the safety net these rights provide, they may not be able to take the time to find a suitable market.